Independence Day: BDO Securities’ tips for financial freedom

Financial freedom is a goal that many people aspire for, but few completely achieve. But, according to BDO Securities, it can be achieved through with disciplined saving, managing expenses, and proper investing.

 In an emailed note to clients to commemorate the country’s independence, the stock brokerage arm of the country’s largest private financial institution offered some tips to guide people’s journey toward that coveted ideal.

Detailed below are its five key pieces of advice.

Know yourself

This includes knowing your objective, investing timeframe (long-term or short-term), risk tolerance, and the strategy you want to adopt (active trading, passive investing). Knowing yourself will allow you to come up with an investment plan or criteria for picking stocks that work for you.

Diversify

Do not put all your eggs in one basket. To reduce market risks, having investment exposure to different sectors, asset class, or geographic location may be considered.

Invest consistently

Just like saving, investing money in the market at regular intervals or frequency (peso cost averaging) benefits long-term investors as this strategy may allow you to accumulate more shares when a stock is trading at a low price. Pro tip: If you are after a stable income, you may buy the same stock that is paying out good dividends. If you are after capital appreciation, you may accumulate a good stock that has good fundamentals (has stable earnings and growth prospects)

Monitor the market

Market conditions evolve and we should always be updated with what's happening in the global and domestic scene. Keep tabs on the developments in the companies that you own as well as in the sectors that these companies operate. Staying informed is key to identifying market opportunities.

Rebalance your portfolio as needed

As you monitor the market, make a regular review whether your strategy is still aligned with your goals. Check if the stocks you own are still doing well and if they still meet your investing criteria. Otherwise, consider rotating your funds to other stocks that are in line with your preference.

Most importantly, BDO Securities urged clients to apply what they’ve learned in their investment journey toward financial freedom.

Happy (financial) Independence Day.